Markets continue choppy trade; Nifty below 10,500 mark

The local benchmarks continued their choppy trade below neutral lines in late afternoon session, with NTPC and Mahindra & Mahindra lost the most. Among sectoral sub-indices, banking, auto and IT stocks got hit, while realty, telecom and metal stocks were rallying. Furthermore, FPIs net outflow from equities along with rising NPAs of public sector banks (PSBs), kept the markets down. Overseas investors have pulled out a massive Rs 7,300 crore from the country's stock markets this month so far, primarily due to rising crude prices and widening fiscal deficit. On the other side, bad loans of PSBs reached to Rs 7,33,974 crore as of September, 2017, mainly due to corporate defaulters. Adding some concerns, a private report stated that though business leaders in India remained largely positive, their level of optimism has dropped to its lowest level in four years even as it has hit a two-year high in the Asia-Pacific. However, losses were limited with NITI Aayog vice-chairman Rajiv Kumar’s statement that a nationwide Goods and Services Tax (GST) regime is likely to stabilise in the next 18 months.

On the global front, European markets remained closed. Asian markets were trading mostly in red. Back home, in scrip specific development, Maximus International traded higher after the company’s wholly owned subsidiary (WOS) situated in UAE - Maximus Global FZE, has decided to acquire 49% stake in Pacific Lubricants LLC, subject to necessary process and compliance.

The BSE Sensex is currently trading at 33909.67, down by 30.63 points or 0.09% after trading in a range of 33889.75 and 34005.37. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.62%, while Small cap index was up by 0.70%.

The top gaining sectoral indices on the BSE were Realty up by 1.65%, Telecom up by 1.43%, Metal up by 1.13%, Basic Materials up by 0.93% and Healthcare up by 0.84%, while Bankex down by 0.16%, Auto down by 0.07%, IT down by 0.07%, PSU down by 0.04% and Power down by 0.04% were the top losing sectoral indices on BSE.

The top gainers on the Sensex were Yes Bank up by 1.94%, Sun Pharma up by 1.72%, Bharti Airtel up by 1.60%, Tata Steel up by 1.51% and Asian Paints up by 1.06%. On the flip side, NTPC down by 1.28%, Mahindra & Mahindra down by 1.03%, HDFC Bank down by 0.89%, SBI down by 0.86% and Coal India down by 0.71% were the top losers.

Meanwhile, bad loans problem of public sector banks (PSBs) has once again taken the centre stage, as according to the Reserve Bank of India (RBI) data, despite the governments’ various efforts NPAs of PSBs reached to Rs 7,33,974 crore as of September, 2017, mainly due to corporate defaulters.

As per the RBI data, though the bad loans of PSBs are rising high, the private sector banks reported a considerably lower NPA figure of Rs 1,02,808 crore. Public sector banks appeared more stressed than private banks, with country’s largest bank, State Bank of India (SBI) accounted for the largest share in the total NPAs at over Rs 1.86 lakh crore, followed by Punjab National Bank (Rs 57,630 crore), Bank of India (Rs 49,307 crore), Bank of Baroda (Rs 46,307 crore), Canara Bank (Rs 39,164 crore) and Union Bank of India (Rs 38,286 crore).

In the private sector, ICICI Bank accounted for the highest amount of NPAs at Rs 44,237 crore by the end of September, followed by Axis Bank (Rs 22,136 crore), HDFC Bank (Rs 7,644 crore) and Jammu and Kashmir Bank (Rs 5,983 crore). The government has restored various provisions for the recovery of the bad loans and has expanded the network of Debt Recovery Tribunals (DRTs). There are 39 DRTs now as compared to 33 in 2016-17 that will help reduce the pending cases as well as expedite disposal of cases.

The CNX Nifty is currently trading at 10487.15, down by 5.85 points or 0.06% after trading in a range of 10477.95 and 10515.10. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.03%, Sun Pharma up by 1.66%, Ambuja Cement up by 1.64%, Bosch up by 1.55% and Bharti Airtel up by 1.49%. On the flip side, NTPC down by 1.25%, Mahindra & Mahindra down by 1.01%, HDFC Bank down by 0.88%, Hindustan Unilever down by 0.83% and SBI down by 0.81% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted decreased 100.58 points or 0.96% to 10,421.91, Nikkei 225 decreased 46.49 points or 0.2% to 22,892.69, KOSPI Index decreased 13.2 points or 0.54% to 2,427.34 and FTSE Bursa Malaysia KLCI decreased 0.54 points or 0.03% to 1,759.70, while Shanghai Composite increased 25.66 points or 0.78% to 3,306.13.